Social Protection Payment Challenge Fund
Name of project: Social Protection Payments (SPP) Challenge Fund
Project partner: Social Protection Payments (SPP) Challenge Fund, via Financial Sector Deepening (FSD) Trust Kenya
Country: Kenya
Coverage: National
Date began: November 2007
Technology used: Smart cards, POS terminals
Services: Providing cash grants to very low-income Kenyans as a first step towards a nationwide social protection scheme
No. of clients reached: n/a |
About the project
The project focused on delivering social grants through bank accounts to 68,000 vulnerable families (with eventual roll-out to 1+ million) by incentivizing private firms to take part and by influencing the government and the donor, the Department for International Development (DFID) to mandate that recipients be offered financial services.
The Government of Kenya and DFID intend to pilot cash grants to very low-income Kenyans as a first step towards a nationwide social protection scheme. The Challenge Fund was conceived as a US$2 million pool to attract the interest of industry at an early stage. Co-financing would give selected industry players a head start in planning how to deliver grants plus a savings mechanism to rural areas with no GSM coverage.
Vodafone and the Sevak Consortium were selected from over a dozen proposals in early 2007. In September, the Fund evaluated prototypes – Vodafone demonstrated a smartcard evolution of its M-PESA service; the Sevak consortium elected a satellite-connected POS option.
Status of project
This project is closed, with partial achievement of the original objectives. Two challenge fund awards were made, which succeeded in getting Vodafone and a consortium of Sevak, Kenya Commercial Bank and PayNet to each develop service prototypes. In addition, DFID and the Government of Kenya decided to require a financial service component for its cash-transfer pilot. However, neither Vodafone nor the Sevak consortium decided to pursue the intended activities beyond the prototype stage. By mutual consent with FSD Trust, the project agreement was closed.
However, the project did achieve some of its objectives. Objectives achieved include convincing the Government of Kenya that grant recipients should be provided with a savings mechanism, and incentivizing commercial players to see delivering social grants as a viable business opportunity.
For more information please write to us at technology@cgap.org.
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